The following cash flow information is presented for the year ended December 31, 2019: Cash flows from operating activities: Net income $ 500 Depreciation $2,800 Gain on sale of land (800) Decrease in accounts receivable 400 Decrease in inventory 500 Increase in accounts payable 800 50 Increase in wages payable Decrease in taxes payable (1,000) 2,750 Net cash flow from operating activities 3,250 Cash flows from investing activities: Land was sold for 1,800 Equipment was purchased for Net cash used for investing activities (3,500) (1,700) (4,350) Cash flows from financing activities: Dividends declared and paid Common stock was sold for Net cash used for financing activities 3,800 (550) Net Change in Cash $1,000 Presented below are selected ratio for Sun Electronics Corporation for the periods 2018, 2019, and the industry average. Financial Ratios 2019 2018 Industry Current Ratio 3.69 2.61 2 Acid-test Ratio 0.79 1.04 1.1 Cash ratio 0.55 0.84 1.00 Inventory turnover 2.77 4.87 4.1 Accounts Receivables Turnover 14.60 5.85 6.00 Debt ratio 40% 46% 40% 15% 17% 22% 8% 8.5% 8.7% Debt to Equity ratio Return on total assets Net profit margin Dividend pay out Price earnings ratio 7.8% 7.8% 7% 13% 11% 10% 16.6 18.5 19 Instructions According to the ratios computed above, answer and explain the following: Explain the company's ability to pay dividends according to cash flows information, Time EDAT:46 Instructions According to the ration computed above, wwwer and explain the following: Explain the company's ability to pay dividends according to cash flow information Campoy unable to pay dividends because of week liquidity position and widetida covecanse ratio cocidonds 0.75 kr than ticach videndi exceed cash flow from operating O Company able to piry dividends because of strong ipuidity position and dividends coverage ratio cromash drividends 1.75 mete than 1 Canh dividends besscach Now from operating Company unable to pry dividends because of weak liquidity position and dividends coverage ratio och endasthan Cach dividendi exceed Castilow from operating Company unable to pay dividend because of weak liquidity position and dividends come to Croach dividends more than 1. Condividends exceed cash flow from operating The following cash flow information is presented for the year ended December 31, 2019: Cash flows from operating activities: Net income $ 500 Depreciation $2,800 Gain on sale of land (800) Decrease in accounts receivable 400 Decrease in inventory 500 Increase in accounts payable 800 50 Increase in wages payable Decrease in taxes payable (1,000) 2,750 Net cash flow from operating activities 3,250 Cash flows from investing activities: Land was sold for 1,800 Equipment was purchased for Net cash used for investing activities (3,500) (1,700) (4,350) Cash flows from financing activities: Dividends declared and paid Common stock was sold for Net cash used for financing activities 3,800 (550) Net Change in Cash $1,000 Presented below are selected ratio for Sun Electronics Corporation for the periods 2018, 2019, and the industry average. Financial Ratios 2019 2018 Industry Current Ratio 3.69 2.61 2 Acid-test Ratio 0.79 1.04 1.1 Cash ratio 0.55 0.84 1.00 Inventory turnover 2.77 4.87 4.1 Accounts Receivables Turnover 14.60 5.85 6.00 Debt ratio 40% 46% 40% 15% 17% 22% 8% 8.5% 8.7% Debt to Equity ratio Return on total assets Net profit margin Dividend pay out Price earnings ratio 7.8% 7.8% 7% 13% 11% 10% 16.6 18.5 19 Instructions According to the ratios computed above, answer and explain the following: Explain the company's ability to pay dividends according to cash flows information, Time EDAT:46 Instructions According to the ration computed above, wwwer and explain the following: Explain the company's ability to pay dividends according to cash flow information Campoy unable to pay dividends because of week liquidity position and widetida covecanse ratio cocidonds 0.75 kr than ticach videndi exceed cash flow from operating O Company able to piry dividends because of strong ipuidity position and dividends coverage ratio cromash drividends 1.75 mete than 1 Canh dividends besscach Now from operating Company unable to pry dividends because of weak liquidity position and dividends coverage ratio och endasthan Cach dividendi exceed Castilow from operating Company unable to pay dividend because of weak liquidity position and dividends come to Croach dividends more than 1. Condividends exceed cash flow from operating